23 Aug 2014
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Town Administrator Proposes 2.4 Percent Tax Increase

Preliminary budget reflects town's continue financial stresses, especially in regards to pensions and Other Post Employment Benefits (OPEB).

Town Manager John C. Klimm's fiscal 2015 budget proposal is complete and it calls for a 2.4 percent tax increase that he described as a continuation of the town's "road to recovery."

"An objective review of Portsmouth’s spending in the past would lead one to conclude that we, like many other communities, have been living well beyond our means; have tried to be all things to all people; and have spending practices that have not included capital infrastructure repair, fund balance maintenance and full funding of our pension and OPEB (other post- employment benefits) obligations," Klimm said in his budget message addressed to members of the Town Council. "The long held practices of spending down fund balances and deferring infrastructure maintenance have been reversed by your leadership and action."

Klimm said the budget is driven in a large part by pension obligations and he praised the non-certified school, town, fire and public works employees who agreed to a pension reform plan in an effort to "help solve the pension crisis in Portsmouth."

But he lamented the rejection of the statewide pension reform deal by union members, who sent the issue back to the courts last week. That will cost the town an extra $600,000 this year alone. That in turn means the police department will see several position freezes as well as other departments.

"Without police department pension reform, our town will assume an unsustainable financial liability," Klimm said.

The budget includes funding for the town's long range public roads problem without borrowing, increases the reserve fund balance, continues the town's community outreach programs and contains a host of recommendations including:

  • The creation of an OPEB commission
  • The creation of a citizen's finance committee
  • Recommends an evaluation of planning, economic development and regulatory services functions within Town Hall
  • Continues efforts for an audit of the Public Works department and continued consolidation exploration with Newport and Middletown
Klimm is also calling for a $600,000 increase in the school budget and closing the campground operation or putting it out to bid.

More details about the proposed budget will be posted soon.

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